Launching an initial coin offering (ICO) might be a great way to raise funds, but the market is fraught with dangers. Over the last two years, ICO news headlines have ranged from highly complimentary to highly contentious.
Indeed, in 2018, the Statis Group published a report that showed that 70% of the previous year’s ICOs were scams. By either failing to deliver on promises or never making it onto an exchange, many of 2017’s ICOs left investors out of pocket.
The result of these negative ICO news headlines has seen a drop in funding over the last 12 months. Although projects on the top ten ICO list for 2019 have attracted millions of dollars in support, the market as a whole has taken a dive. With safety and legitimacy being an issue, companies have decided to act.
IOTA, the company behind MIOTA Coin, proposed using smart contracts for ICOs. By getting users to pay for a future service rather than tokens, rules could be coded into smart contracts to ensure the benefits are released as certain conditions are met.